Making an ascendance in the business world is a massive undertaking from a humble company that has ambitions above its means. The difficulties you can have as a startup or a small business doesn’t need to be discussed in any great detail. Bottom line = it’s difficult! But the big question to ask yourself is what can we do to improve ourselves? It is something you should be asking yourself on a daily basis. While making a transition from a small company to a bigger one is a massive undertaking and requires a change in personality and leadership as well as possible changes in location and scaling up the company, what you can do to better prepare yourself? This is where benchmarking comes in. Benchmarking is a process you can use to compare your business to others so you can identify areas you need to improve on. Here are some aspects you should look at if you want to see how you compare to bigger companies.
The first step in benchmarking, as it is essentially comparing you against another company, is to choose who to compare yourself to. There are support networks to help you pick the right company, such as Business Link or your local trade association, but the best method you can do yourself is to pick businesses that are of a similar size and have similar objectives to you. That way you can give yourself a reasonable yardstick to measure against, but also choose companies that are outside of your sector. These companies should perform well in areas that you wish to excel at, and by implementing their approach to your business, it will help you expand your own repertoire.
Look at the successes of your firm at the moment; is there one process that you pride yourself on? If you provide a service, it could be customer service that you are exceptional in. These are known as your business drivers, and by having a thorough understanding of your strengths, this makes benchmarking against another company an easier process, and one that you will get a lot from.
Looking at your resources is a true benchmark of understanding if you can make the transition from smaller business to a larger company, especially if you are trading on your own or in a partnership. Do you have the necessary skills to take the business to the next level? There are many companies that provide training and skill refinement on topics like health and safety, employment law, or being a skilled leader, like Ellis Whittam, and these resources are as important as the physical resources. Look at your resources against the company you are benchmarking against, are they putting in more or fewer resources in staff or equipment? Are they spending more in other areas, like marketing or IT services? Resources are an important asset, and how you allocate them can make a big difference to your company.
Measure your productivity by calculating how much sales you make per employee. This is a relatively straightforward method of testing how much productivity your company is generating by focusing on each member of staff and understanding their worth to the company. However, this is not to say that your staff members could be the reason the product is not selling! If your sales are low across the board, this could mean that there is a problem with the product. You could be selling it to the wrong market, or the product is not right. Productivity can also be measured in how many customers return to you, which will highlight how good your customer service skills are in the business as a whole. You can also look at how long it takes to process orders and the amount of complaints.
Benchmarking is a process that can take some time, but it is a valuable approach to understanding how your business processes are making their impact. If your company is small, it can provide a valuable insight into what you need to ensure that you are trading to the highest possible standards. The process is not merely a way to glean ideas from other companies and pass them off as your own, it is a way to look at companies similar to yours and companies you wish to emulate the success of. You can implement successful strategies only if they really gel with your business processes. It can cause teething issues, but by looking at companies similar to yours gives you the best possible perspective on how it could turn out if you do implement them.